The EU & Malta are expending a great deal of effort to achieve their main goal, which is to become undisputed fintech leaders. If you’re a foreign investor, establishing a fintech company in the EU & Malta can be quite a challenge for you, especially in view of the recent changes in the two jurisdictions’ regulatory framework. To make your job easier, we’ll try to analyze them & provide you with some practical tips.
Registering a Fintech Company in Malta
Being the country’s main financial regulator, the MFSA is responsible for the monitoring & supervision of financial services provision in Malta.
To improve the effectiveness of its operation, the organization has taken a gamble by putting in place a revolutionary regulatory mechanism. Meant to offset potential risks associated with illegal activities of financial services providers, it enables to direct resources to the most significant players in the market & eliminate threats to the financial market’s stability.
Achieving this goal requires meeting these four criteria:
- assessing risks;
- implementing surveillance programs;
- regularly monitoring & evaluating companies.
The regulator has also come up with a document aimed at increasing transparency & accountability. It makes an assessment of potential risks & outlines challenges that need to be dealt with in order to improve the effectiveness of the suggested mechanism.
Registering a Fintech Company in the EU
After evaluating more than two hundred trading platforms, the ESMA has come up with a statement outlining its position on post-trading transparency & setting limits under MiFIR & MiFID II. Another document published by the organization is dedicated to the best outsourcing practices for CSPs. The idea behind is to assist companies & relevant authorities in identifying, reviewing & monitoring challenges & risks arising from cloud services outsourcing.
All those considering registering a fintech company in the EU are highly recommended to closely scrutiny both documents to avoid any eventualities during the registration process.
Updated Requirements for Establishing AIFs in the EU
The ESMA has come up with a guide dedicated to MiFID II compliance which is meant to replace its identically named previous document. The guide, which contains new rules for opening a financial company in the EU, also includes updated information on increasing clarity & promoting greater convergence in implementing & overseeing new MiFID II requirements.
EU: Obtaining a Financial Services Provider License
The EBA has come up with its own document dedicated to the barriers to the provision of TPPs as per the RTS for SCA. Meant to revise the rules contained in the PSD2, it provides customers with an opportunity to use innovative payment services.
EU: Implementing New Regulatory Framework for Investment Companies
Following a series of public consultations dedicated to wage, reporting & disclosure requirements, the EBO has released 2 documents in which it makes a pledge to foster implementation of a regulatory framework matching the size & character of EU investment companies. According to the statement, this will enable the organization to more effectively carry out its oversight function which will now be more dependent on the risks faced by investment companies & their clients.
Consultations: The Takeaway (Registering an Investment Fund in the EU)
The 1st document contains requirements for investment companies. This is what it’s made up of:
- 3 projects on reclassification of IICs into credit organizations;
- 5 projects on capital requirements for IICs;
- 1 project dedicated to prudential consolidation of GICs.
The 2nd document outlines reporting & disclosure requirements & contains information on:
- funds disclosure;
- amount of capital;
- level of activity.
According to the second document, companies meeting the above requirements may obtain a payment organization license in the EU.
The two remaining documents contain requirements for the assessment of employees whose operational activity greatly affects the risks faced by their company & the way it manages its assets.
And that wraps up our brief overview of the regulation of fintech sector in the EU & Malta. If you need more detailed information on the topic of the article, do not hesitate to contact IQ Decision UK. Our legal experts will be more than happy to provide you with an individual consultation on regulation of fintech companies in the EU.